Tuesday, September 4, 2007

None of us will make it through life without committing a series of mistakes or errors in judgment. I know I have made my share. Mistakes are a part of life. I don't mind making them, however I don't want to keep repeating the same ones over and over.

Some of them have been very costly and downright embarrassing.

Let me share with you one of my biggest mistakes, and more importantly, let me share with you the valuable lesson I learned from it.

It was 1997. I had worked my way out of poverty and had grown my business from a $100 investment into a $200,000 a year income.

I had learned how to make money, but had no clue how to manage it.

An acquaintance of mine, we'll call her Joni, mentioned to me that she was buying a lot of shares of a particular stock, with the expectation that it would soon split or triple in price within a few months. She told me she was investing her life savings into buying as much as she could and that I should do the same.

I thought about it, and at the time, I was saving money to buy my mom a new house so I thought, hey if I took the $30,000 I had saved up and bought the stock - and it tripled, that would be $90,000. Great move, right? (Mistake #1)

Well obviously I had never purchased stocks before and I had no idea how to do it. So what did I do?

I heard my UPS guy, (yes, my UPS guy) invested in stocks so I asked him how to buy stocks. He told me to go to XXX broker in town (who shall remain nameless) and open an account. (Mistake #2)

So I went to the broker, whom eagerly helped me open an account and he completed the transaction that bought me $30,000 of this particular stock. (Mistake #3)

Within a few months, the stock had plummeted and went from $30,000 down to $400. That's not a typo, it had gone down to $400.

I was sick about it. I was incredibly disappointed in myself.

I was upset with the other parties who guided me to create that outcome. I had every reason to be angry. I felt cheated. I mean, I later learned the broker broke the law and never should have placed such a large order for a first time client. They are not supposed to allow beginners to take such large risks.

I had every reason to blame everyone else for what had happened.

But I learned a very valuable lesson during that time and it has served me ever since.

I want to share it with you because I want you to pause and think about this the next time you experience a challenge, a difficulty or a problem in life, especially when you are tempted to blame everyone and everything around you.

Here is the lesson.

You always have a choice.

You see, I could have looked at that situation from a "Nail in My Coffin" perspective: ie "those people did me wrong and it's their fault," and "I'll never buy another stock again"

OR

I could have looked at it as a "Catalyst for Change" perspective. ie "I am responsible. I made the decisions, I didn't do my diligent research, I invested too much on my first trade, I will take a step back and re evaluate my approach next time."

Let me simplify it and break it down even further:

Problem: lost $29,600 in stock trade

My Choices:

Nail in Coffin = I am a Victim and I give my power away when I blame others

OR

Catalyst for Change = I emerge the Victor because I claim my power to change the present and the future by taking responsibility

You see, I could have easily put the blame on everyone else. And if I did that, I would never have learned the lesson. I would have never changed. Though it wasn't easy, after looking at it, I knew there were a number of things I could have done differently.

Whenever you focus blame outside of yourself, you give your power away. Whenever you take responsibility, you claim your ability to change, grow, and create different outcomes in the future.

I knew that despite the appearance of the circumstances, that I was responsible for that loss. I made a series of errors in judgment, as well intentioned as they were.

As long as you blame others outside yourself, you will not change. Nothing will change for you. You will be doomed to repeat the same mistakes.

You always have a choice.

Liberate yourself by taking responsibility for your actions, even when you can justify placing it outside yourself. Let your mistakes serve you. Learn from them, let them change you for the better. Let them empower you.

I turned one of my biggest mistakes into one of my greatest lessons and by taking 100% responsibility, I allowed it to serve me. I took back my power.

I used as a catalyst for positive change.

"Every problem contains within it the seed of an equal or greater opportunity. Not just some of the time, but all of the time." -Jill Koenig

The facts remained the same, I still lost $ 29,600. But it doesn't hurt anymore. My perspective on it changed.

It became a blessing that has served me many times over.

When you change the way you look at things, the things you look at change.

Live Your Dreams

Jill Koenig, the "Goal Guru" is America's Top Goal Strategist. A best selling Author, Coach and Motivational Speaker, she is an expert on the subjects of Goal Setting, Time Management and Business Success. Her Goal in life is to help you UNLEASH your untapped potential. Get your FREE Goal Setting CD at: http://www.GoalGuru.com

Media Requests: Jill Koenig is a dynamic high energy TV and radio guest available for interviews and corporate speaking engagements.

This story is entirely true. I swear that this did happen. In a parallel universe. And if you don't believe in parallel universes, you are a scientifically illiterate monkey and you should stop reading this article right now.

Okay, okay... I was only joking. As a theoretical physicist by training, I may be wrong about the monkey part (and may I suggest that you consult it with a zoologist to be perfectly sure about it), but the idea of parallel universes, as crazy as it sounds, may not be that crazy after all. Certainly not by scientific standards.

Now, in the Universe we happen to inhabit, also known as "the best of all possible worlds," the effect of Paris Hilton set on fire turned out to be pretty washed out. Fortunately for Paris... I am not so sure about the rest of the world, though.

In this Universe, Mika Brzezinski only attempted to set on fire a report about Paris Hilton release from prison having found it trash- rather than news-worthy. Since the lighter she was using refused to fully cooperate, she ended up tearing the report into pieces.

This simple act of journalist defiance against conveying trash information and, let's be perfectly honest here, some well calculated showmanship (or should we rather call it "showpersonship??") as well, made Mika Brzezinski an instant journalist superstar on YouTube.com and other hot Internet channels.

Nice job, Mika, although if I am to be totally honest, and with all due respect, this somewhat pales in comparison to what some Polish journalist, also a female (you male brownies take a note!), did some 17 years ago, when she publicly and demonstratively told the audience of TV news that she was quitting her job because she could not stand relaying the news the way her bosses insisted on. She then walked out of the studio. It was all live.

Mika Brzezinski is a daughter of Zbigniew Brzezinski, arguably the most influential Polish-American political strategist, a former member of the Carter administration.

Waldemar Puszkarz, Ph.D., is a web veteran with 15 years of web surfing under his belt. By training, he is a theoretical physicist, but his interests are much broader than science and include trading financial markets, sports betting, poker, and researching online business opportunities. He is also an avid book reader and sports afficionado. Currently he is making his living mostly as a day trader. He has been in the trading trenches for almost a decade during which he has traded a variety of financial instruments. He is the owner and webmaster of Eminimethods.com (http://www.eminimethods.com) which provides free common sense trading education and simple trading systems for e-mini and stock markets as well as reviews of honest online business opportunities in Meet HOBO (http://www.eminimethods.com/HOBO.html) section of his site.

Is Google Adwords giving you trouble? Are you having trouble trying to set up your Google Adwords campaign properly? Have you been advertising with Adwords for awhile now without having much success? Have you ever read a good Google Adwords guide book, preferably one by Perry Marshall? If not, what in the world are you thinking?

It's true that you can make an enormous amount of money by using Google Adwords, but you must learn what you're doing first. Just like anything else in life, this is a learning process. The rewards are great once you've learned the lesson and taken action, but you can easily lose your shirt if you don't find out the right way to do things first. Think about it like this, would you play the stock market without learning what you're doing first, or at least hiring someone who knows what they're doing? That would be a seriously ignorant maneuver, yet people do it with Google Adwords all the time. Actually, not just Google Adwords, but with other pay per click search engines also, like Yahoo and MSN.

The Perry Marshall Definitive Adwords Guide is the top-rated book on Google Adwords, without question. It was co-written by Bryan Todd who is one of Perry's top assistants and also a member of his coaching faculty. The book is 113 pages long and is updated every year at no extra charge. These guys live and breathe Google Adwords and they constantly test everything that they do in order to find better ways to beat the Adwords system. Those that own the book have a huge advantage over everyone else because they're reaping the rewards of all the hard work that these guys put in with the free updates.

If you haven't bought and read a good Google Adwords book, especially Perry Marshall's Definitive Guide, you're wasting your time, your money and your not seeing the total benefit you could be getting out of your Google Adwords campaigns. I highly recommend that you get more information about a good Google Adwords guidebook.

Does Pay Per Click Advertising Have You Confused? Find Out Important Things That You MUST Know About These Topics And More By Going Right Now To PayPerClickFirm.net or by clicking on Google Adwords Guide Book. Joe Stewart is a Webmaster and Internet Marketer That Uses Pay Per Click Advertising And Search Engine Optimization To Advertise Online.

Swaptree Swaptree is a great service that I came across recently. It lets you trade books, music, movies, and games with others for free. You tell the system what you have, and it figures out what you can get in exchange. Note that it supports one-for-one item trades only, but allows for three-way trades.

How Swaptree works Swaptree does a good job laying out the ground rules simply and clearly. There is also a wonderful walkthrough here. Ebay users will find a similar buyer/seller rating system that they are accustomed to.

The site has been out of public beta since July 4th (so its no longer invite only) and seems to be gaining steam. Way to go, guys!

Freecycle Freecycle would be a good alternative if you were looking for an item outside of books, music, movies, and games - such as apparel, computers, and furniture. The concept is that someone wants to get rid of something, while another person want s the same item. Rather than throwing the item away or trying to sell for a minimal amount, the item is given away, provided that a local person comes to pick it up.

The Freecycle website - http://www.freecycle.org contains a short animation of how Freecycling works as well.

At the time of this posting, there are a total of 4,041 Freecycle communities throughout the world. Chances are, you are either in or near one of them.

Unless you are involved in the stock market, or understand the jargon you may not understand what the term bull market or a bear market means. Stock prices are reflected in what is known as the financial market trends. These trends can best be demonstrated in a price chart and the purpose is to pick the best investment and trading opportunities. You may ask what drives these trends. Buyers and sellers are the driving factor, they are also known as the bulls and the bears.

When we say that it is a bull or bear stock market we are talking about the driving force behind the market. The bulls are the buyers so that would make the sellers the bears. Incidentally when we use the term bull or bear we could also be talking about specific securities and sectors.

A bull market is a market that is associated with investor confidence. As a result of this increase in confidence investors are more likely buy in anticipation of making a capital gain. The most memorable and longest running bull market was seen in the 1990s. This was the time when the U.S. and other global markets saw their fastest growth spurt ever.

Just to recap, in a bull stock market the investors are buying. They are looking for more ways to increase their capital gains. So then if it is a bear market, the opposite would be true. Investors will be more pessimistic about buying and are more inclined to sell their stocks to cut their losses. A bear stock market does not come about from a small decline, but a considerable drop in prices over a prolonged period of time. From 1930 to 1932 was probably the most infamous bear market in history. This bear market was the beginning of the Great Depression. There was a much less severe bear market from 1967 - 1983, which included the energy crises of the 1970s and the unemployment surge in the 1980s.

As we already stated a bear stock market does not come about as a result of a small dip in stock prices, it indicates sizable fall in prices over a prolonged period of time. It is most commonly accepted that in order for the stock market it to be considered a bear market there has to be a price fall of at least 20% in a key stock market index from a recent peak that happens over at least two months.

To summarize a bull stock market has investor looking to buy to increase their capital gains. They will be seeking out the best investment opportunities. A bear stock market has these same investors looking to sell their stocks so they can minimize their losses. Historically the U.S. has been a bull market. That is one of the factors why we have been considered the land of opportunity.

If you trade, you may have heard of options. Trading options carries high risk and has many disadvantages for beginners and even seasoned traders. Therefore, it is wise to be cautious if you are considering options trading.

An option is a contract between two parties giving the taker or buyer the right, but not the obligation, to buy or sell shares at a specific price on or before a specific date. To have this right, the taker pays a premium to the writer or seller of the contract.

There are two types of options available: call options and put options.

Call options give the taker the right but not the obligation to buy the shares at a specific price on or before a specific date.

The put options give the taker the right but not the obligation to sell the shares at a specific price on or before a specific date. The taker of a put is only required to deliver the underlying shares if they exercise option.

There are a few advantages in option trading:

Put options allow you to hedge against a possible fall in the price of the shares you hold. You can consider taking it out as insurance against a loss in the share price.

By taking a call option, the purchase price for the shares is locked in. This gives the call option holder until the expiry date to decide whether he or she will or will not buy the shares. This is also applicable to the taker; he or she has to decide whether or not to sell the shares before the deadline.

The ease of trading in and out of an option position makes it possible to trade options with no intention of ever exercising them. If you expect the market to rise, you may want to buy call options, and if you are expecting a fall in the market, you may decide to buy put options. This means that you can sell the option prior to the expiry date to take a profit or limit a loss.

Options also allow you to build a diversified portfolio for a lower initial outlay than purchasing shares directly.

The income generation for options can get you profits over dividends by writing call options against your shares. By writing an option, you receive the option premium up front. While you get to keep the option premium, it is possible that you could be exercised against and have to deliver your shares to the taker at the exercise price. This strategy uses stock bought on margin.

By combining different options, or stocks with options, you can create a wide range of strategies.

You can earn extra income by writing options against shares you already own or are purchasing. This is one of the simplest and most rewarding strategies.

Using options gives you time to decide. Taking a call option can give you time to decide if you want to buy shares. You pay the premium, which is only a fraction of the price of the underlying shares.

The option then locks in a buying price for the shares if you decide to exercise. You then have until the expiry date of the option to decide if you want to buy the shares. This is the same as to the put option.

Keep in mind that, same as any other trades do not trade what you cannot afford to lose.

Investment and trading both involve the purchase of assets in the hope that they will appreciate in value. However, there are significant differences in these contrasting approaches with the prime differentiator being the time frame involved.

Investment is something everyone should be involved in to some extent or another. Many do not consider themselves investors, but if you own (or are purchasing in mortgage) your own home or have a pension plan or insurance policy then you are an investor and your financial well being depends on the performance of stocks and/or real estate.

Trading is a minority activity seeking to derive profit (income) from the short term buying and selling of assets, or put simply selling higher than the buying price.

Investment is a long-term endeavor. It may be for life, as in providing a roof over ones head, or over many years, as in putting ones kids through college or providing an income in retirement.

On the other hand trading is relatively short-term, ranging from day-trading where positions are opened and closed within the space of a day up to holding them for a month or longer.

Investments usually consist of holding actual assets, eg stocks, bonds, real estate Trading can mean holding assets but also consists of devices such as short selling (selling an asset you dont have in the hope its price will fall), making use of margin (or leverage - ie trading with borrowed money), foreign currency (FOREX) trading, and more sophisticated vehicles such as options, CFDs (Contracts for Difference), spread betting etc.

Investment is concerned with gaining both from an increasing asset price and the income gained from holding the asset (interest, dividends, rent). Trading is primarily concerned with profiting from movements in the asset price.

Trading is essentially a form of gambling, though hopefully a more informed (and less random) kind than the roll of a dice or the spin of a roulette wheel.

Investors generally rely on fundamentals in choosing investments, ie they look at the global and national economy, whats happening in a particular sector, and at the prospects for the asset under consideration. Traders do the same, but they also rely on technical analysis (chartism) which attempts to predict future price movements by looking at graphs or charts of historic prices. Theres absolutely no logical reason this should work, but charts do perhaps give a picture of market psychology, and more importantly are followed by many and as such may become a kind of self-fulfilling prophesy. Technical analysis tends to be used most for i) short-term (day) trading and ii) optimizing entry and exit points (timing).

The key point is to know whether you are a trader or an investor. As weve said investing is something that should be done by just about everyone, trading certainly is not. If you do decide to become a trader, make sure it is a conscious and informed decision. Study loads, and do lots of paper trading (trading with virtual rather than real cash - there are lots of trading houses out there that will let you set up practice accounts for this purpose). Find a system that works FOR YOU, and stick to it along with disciplined risk and money management.

Johnny Finnis is editor of personalmoneymanagement101.com a simple and unbiased introduction to finance and investment for ordinary people to make the most of their money. Have your say on our blog